Thursday, June 25, 2009

The Debts of the Lenders: China Expands Global Reach to Iraqi Oil Fields

After getting stiffed in 2003 and losing its existing deal(s) w/Saddam Hussein, China is back in Iraq. Well, at least through a backdoor. Sinopec recently bought Addax Petroleum, a Swiss energy company w/concessions in Iraq's Kurdistan region (supposedly one of the "safer" regions of Iraq).

Such an acquisition meshes well w/China's overall goal of achieving more reliable energy supplies. Since they are working in an American controlled region of the world, China has suddenly become a lot "friendlier" lately in its international relations. Instead of issuing bombastic attacks that question the value of the US dollar and treasury market, recent language has become a lot more subdued.

Subtle clues were issued at the end of the Shanghai Cooperation Organization's meeting earlier this month when the Russian-Chinese sponsors decided to tone down their criticisms of dollar hegemony by reiterating the continued importance of the greenback in the international economy.

China firm gains Iraq, Africa oil

China's second-biggest oil company has gained reserves in Iraq and Africa after agreeing a record-breaking merger with a Swiss oil explorer.

Sinopec, a subsidiary of China Petrochemical Corporation -Asia's largest oil refiner -agreed to pay $7.2bn for Geneva-based Addax Petroleum Corp in its biggest overseas acquisition to date.

Sinopec said in a statement the deal was a "transformational transaction" which would "further enable it to achieve its strategic objective to build a stronger presence and operations" in West Africa and Iraq.

The purchase of Addax is part of China's efforts to secure energy reserves to fuel its growing economy.
blog comments powered by Disqus

Blog Archive